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ENERGETICA INDIA MNRE-UNDP/GEF Biomass Power Project Refinance Scheme In order to overcome challenges facing Indian biomass sector and to improve the viability of projects, funds of Rs. 15 crores from MNRE- UNDP/GEF Biomass Power Project are being used for refinancing of loans at concessional interest rates. The Ministry of New and Renewable Energy (MNRE) is implementing a MNRE–UNDP / GEF assisted Project on “Removal of Barriers to Biomass Power Generation in India”. The key objective of the project is to accelerate the adoption of environmentally sustainable biomass power technologies by removing the barriers identified, thereby laying the foundation for the large scale commercialization of biomass power through increased access to financing. Biomass has always been an important energy source for the country considering the benefits and promises it offers. It is a carbon neutral fuel source for the generation of electricity and apart from providing the much needed relief from power shortages; biomass power projects could generate employment in rural areas. As of March 31st, 2015 grid connected biomass power plant capacity stands at 1,410 MW. However, a large number of biomass projects in the recent past have been affected/ suffered difficulties in view of uncertainties in policy/regulatory matters such as low tariffs, higher wheeling and banking charges, cancellation of PPAs, higher transmission & cross subsidy charges, in addition to abnormal escalation of biomass fuel costs apart from the force majeure conditions such as floods, cloud bursts, draught etc. Due to the above unforeseen circumstances, the projects viability & ability to repay the loan has been affected. In order to overcome these difficulties to some extent and to improve the viability of the above projects, it is proposed to use the funds of about Rs. 15 crores from MNRE- UNDP/GEF Biomass Power Project for refinancing of their loans outstanding at concessional interest rates. Indian Renewable Energy Development Agency Ltd. (IREDA), will assist the Project Management Cell (PMC) in the scheme implementation. The Scheme is to be known as the “MNRE UNDP/GEF Biomass Power Project Refinance Scheme” for revival of existing Biomass Projects affected due to unforeseen circumstances”. The support will be provided to biomass projects (maximum 4 no. of projects) where there is a possibility of revival of their operations within short period of time and there is also need to utilize these funds by 31st December 2015. Objectives The proposed Refinance Scheme aims to reduce the cost of debt for Biomass Power Projects by providing refinance at concessional rates of interest, directing funds from the MNRE- UNDP/GEF Biomass power project “Removal of Barriers to Biomass Power Generation in India”. Only grid connected biomass combustion projects would be considered. Financing Structure IREDA will provide funds received from MNRE- UNDP/GEF Biomass power project by way of refinance to scheduled commercial banks and financial institutions in respect of their lending to the biomass projects. The refinance amount shall in no case be more than Rs. 10 Crores per project. The rate of interest on the refinance from IREDA to Banks/FIs will be two per cent per annum. The scheduled commercial Banks/ FIs are required to provide the refinanced component of loan to the borrower at the same interest rate i.e. two per cent per annum. Repayment period for the refinance amount will be co-terminus with the repayment period of Bank/FIs for that project and the maximum repayment period shall be 10 years apart from moratorium/ grace period of 6 months from the date of disbursement/ release of Refinance Loan. Eligibility Institutions eligible to avail refinance: Scheduled commercial banks and financial institutions would be eligible for refinance under this Scheme. Grant of refinance shall be at the discretion of PMC who would also determine the availability and extent of refinance. The projects are to be selected based on: • Operational Combustion based Biomass grid connected power projects, up to installed capacity of 10 MW. Projects of more than 10 MW may also be considered, however, the refinance amount will be limited to the amount as per pro rata basis up to 10 biomass power projects could generate employment in rural areas. As of March 31st, 2015 grid connected biomass power plant capacity stands at 1,410 MW BIOMASS 56 energética INDIA · NOV | DEC15


energetica-india-54
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